By Lauren Riddick, Codilis & Associates
A recent case from the Illinois Supreme Court may help protect lenders, at least partially, from suits stemming from property preservation. In Schweihs v. Chase Home Finance, 2016 IL 120041, a lender-employed contractor entered a borrower’s home during the borrower’s redemption period in order to “winterize” the property—i.e., change one of the locks to obtain access for possible repairs and ensure that the utilities were turned off. The subject mortgage permitted a lender to enter the property in order to “make repairs.”
Upon arriving at the property, the contractor observed a “For Sale” sign, uncut grass, overgrown trees, utilities that were turned off and a car parked in the driveway. Repeated knocks to the front door went unanswered. The contractor spoke with a neighbor, who stated that the home was unoccupied and that she did not recognize the car in the driveway, but further stated that students at a nearby school, aware that the home was vacant, occasionally parked there. The court noted that the contractor spent in excess of 45 minutes determining if the home was occupied. Upon entering the backyard, the contractor stated that boxes, garbage and debris could be observed through sliding glass doors. Once in the home, the contractor was confronted by a woman, at which point the contractor immediately exited, requested she speak with him at the front door, and then waited for the police to arrive. Id., at ¶8-9, 11-12. The woman later filed a multi-count complaint alleging trespass, negligent trespass, private nuisance, negligence, and intentional and negligent infliction of emotional distress.
In determining her claim for negligent infliction of emotional distress, the court stated that the necessary legal standard differed depending on whether the plaintiff was a direct victim or a bystander. Bystanders must show that at the time of the incident they were in a zone of possible physical danger that caused such fear as to result in physical injury or illness. Direct victims must show that at the time of the incident they suffered a contemporaneous physical injury. As the borrower was a direct victim and failed to show a contemporaneous physical injury resulting from the lender’s actions, her claim for negligent infliction of emotional distress was dismissed. Id. at ¶44.
In determining her claim for intentional infliction of emotional distress, the court stated that in order to recover, the lender’s conduct would need to have been extreme and outrageous. In fact, the court noted that liability had only been found where the conduct was so extreme as to be “atrocious” and “utterly intolerable in a civilized community.” Id. at 51. The court ruled that the contractor’s conduct, since the plaintiff was aware that her property was in foreclosure and in the redemption period, and since the contractor immediately removed himself from the home and waited for the police, did not rise to the level of extreme and outrageous. Id. at ¶54-55. The court further noted that the lender had legal justification to enter the property because the mortgage permitted such action and because the judgment of foreclosure specified this right.
Although positive, lenders should take this ruling with a grain of salt, as it only provides protection from the recovery of the specific torts of intentional and negligent infliction of emotional distress, not from the recovery of damages for emotional distress resulting from other torts, such as ordinary negligence or trespass.